The trust decanting statutes: Nuisances that should be repealed.

Inherent in a trustee's discretionary authority to make a distribution of trust property outright and free of trust to a permissible beneficiary of the trust may well be the authority to distribute the property instead to another trustee for the benefit of that beneficiary. That is the essence of the concept of "decanting" in the trust context. In recent years, a number of state legislatures (U.S.) have seen fit to codify the concept. Massachusetts has not. No need. On July 29, 2013, its Supreme Judicial Court found that a trustee of a certain discretionary trust had implied common law decanting authority: “We regard this broad grant of almost unlimited discretion as evidence of the settlor’s intent that the disinterested trustee have the authority to distribute assets in further trust for the beneficiaries’ benefit.” Morse v. Kraft, 2013 WL 3853152 (Mass.)). Charles E. Rounds, Jr., in §3.5.3.2(a) of Loring and Rounds: A Trustee’s Handbook (2013), questions the wisdom of barnicalizing by statute this very simple equity-based concept. The relevant portions of the section are reproduced here.